Google on Wednesday said that it finally struck a multiyear deal with News Corp, the largest owner of newspapers by circulation in Australia, to pay for its content.
Why it matters: The deal, along with several others reached between Google and Australian publishers in recent days, will likely allow the tech giant to avoid a sweeping new Australian law that would have forced it and rival Facebook to pay publishers on terms set by third-parties if they were unable to reach agreements themselves.
Details: Google has agreed to pay News Corp an undisclosed amount for contentto be featured in a new product called the Google News Showcase.
- Among the News Corp publications joining will be The Wall Street Journal, Barron’s, MarketWatch, and the New York Post in the U.S.; The Times and The Sunday Times, and The Sun in the U.K; The Australian, news.com.au, Sky News, and multiple metropolitan and local titles in Australia.
- The 3-year agreement also includes the development of a subscription platform for News Corp outlets, according to a statement, as well as the sharing of ad revenue via Google’s ad technology services, and "the cultivation of audio journalism and meaningful investments in innovative video journalism by YouTube."
Over the past week, Google has struck deals with several Australian publishers, including Nine Entertainment, Junkee Media and Seven West Media.
- Australian lawmakers have said they would avoid passing the law if Google and Facebook reached payment terms with Australian news publishers on their own.
- The law was brought to Parliament for consideration this week.
- If deals like this weren't struck this week, passage would've inevitably happened in coming days, although lawmakers haven't said for certain that the law is 100% off.
Be smart: The deal with News Corp. was the last remaining agreement with a publisher that Google needed in order to really be able to skirt the proposed law.
- News Corp owns about 70% of the Australian newspaper business and is known for having a strong lobbying influence in Australia on this issue.
- “The deal simply would not have been possible without the fervent, unstinting support of Rupert and Lachlan Murdoch, and the News Corp Board," News Corp. CEO Robert Thomson said in a statement. Thomson also thanks Australian lawmakers for standing firm "for their country and for journalism.”
The big picture: What's happening in Australia serves as a litmus test for other countries looking to rein in the power of Big Tech companies globally.
- The law would've made Australia the first country to force both Google and Facebook to pay news publishers for their content or else be subject to hefty fines.
- Both Facebook and Google have said they can't run their businesses as usual if the law takes effect and warn that if Australia passes it as expected, they'll pull some of their services from the country.
- Other countries in Europe and even the U.S., are also considering measures to help even the playing field between tech firms and legacy industries, like newspapers.
These types of global threats have forced tech giants to create new features that steer money to news outlets without having to totally reimagine their businesses.
- Google said last fall it would pay publishers $1 billion for their content to appear in Google News Showcase.
- Facebook has spent millions of dollars paying publishers to be a part of its Facebook News tab. Facebook News launched last week in the U.K.